Aeroflot chief says some Russian airlines may go bankrupt
05.08.2020,
13:07
Russia's flagship carrier Aeroflot is not planning to lay off staff in the near future, CEO Vitaly Saveliev said in an interview with TASS.
YEREVAN, August 5. /ARKA/. Russia's flagship carrier Aeroflot is not planning to lay off staff in the near future, CEO Vitaly Saveliev said in an interview with TASS.
"We haven’t cut a single job and we have no plans to do this in the near future. We hope that the situation will get better by the end of this year. In fact, it is getting better already. My hope is that the industry will recover slowly but surely," Saveliev said.
According to Saveliev, the company had considered several anti-crisis scenarios, which suggested personnel cuts, the sales or bankruptcy of subsidiaries, but finally it decided to avoid this.
"We drafted three scenarios, three packages of solutions I would have activated depending on the circumstances. Precisely the way it was done in 2009. I would prefer not to disclose the details. It’s our internal corporate business, but measures to be taken in case of a crisis should be kept handy. At the very least there can be personnel cuts, and at the most there can be the auctioning or bankruptcy of subsidiaries for the sake of survival. We decided to avoid this," he said.
In his words, there is another problem - the possibility that some Russian air carriers will go bankrupt in the autumn. He said of the one hundred licensed Russian airlines only 48 are present on the market in reality.
'There are some very strong players, such as S7 Airlines. There are some other noteworthy rivals and the top 20 account for 97% of the traffic. But the others have their clients, too,' he said, adding that according to experts’ estimates, 12%-14% seats on the market in 2019 were redundant.
'What is happening now that the market has slumped 50%? Nobody has stopped yet. This means that companies resort to dumping tactics. They do not hesitate to go to great lengths in the competition for passengers. It is good news for those who fly and bad news for those who provide the service. The net effect for the air carriers may be a very sad one. Utmost competence and caution are needed.' -0-
"We haven’t cut a single job and we have no plans to do this in the near future. We hope that the situation will get better by the end of this year. In fact, it is getting better already. My hope is that the industry will recover slowly but surely," Saveliev said.
According to Saveliev, the company had considered several anti-crisis scenarios, which suggested personnel cuts, the sales or bankruptcy of subsidiaries, but finally it decided to avoid this.
"We drafted three scenarios, three packages of solutions I would have activated depending on the circumstances. Precisely the way it was done in 2009. I would prefer not to disclose the details. It’s our internal corporate business, but measures to be taken in case of a crisis should be kept handy. At the very least there can be personnel cuts, and at the most there can be the auctioning or bankruptcy of subsidiaries for the sake of survival. We decided to avoid this," he said.
In his words, there is another problem - the possibility that some Russian air carriers will go bankrupt in the autumn. He said of the one hundred licensed Russian airlines only 48 are present on the market in reality.
'There are some very strong players, such as S7 Airlines. There are some other noteworthy rivals and the top 20 account for 97% of the traffic. But the others have their clients, too,' he said, adding that according to experts’ estimates, 12%-14% seats on the market in 2019 were redundant.
'What is happening now that the market has slumped 50%? Nobody has stopped yet. This means that companies resort to dumping tactics. They do not hesitate to go to great lengths in the competition for passengers. It is good news for those who fly and bad news for those who provide the service. The net effect for the air carriers may be a very sad one. Utmost competence and caution are needed.' -0-
